Costly textile raw materials hinder growth

The basic raw materials, MMF and filaments, were costlier by 23 to 30 percent due to 5 per cent import duty, four percent special additional duty, 12.5 percent central excise duty and anti-dumping duty on certain fibres and filaments, according to the Chairman of the Southern Textile Mills Association (SIMA).

This has impacted the growth of our nation’s textile sector. The MMF textiles and clothing exports accounted for 80 per cent and cotton textiles for 20 per cent in China, while in case of India it was totally opposite.

SIMA Chairman M. Senthil Kumar stated that Country’s textile sector could not achieve the envisaged growth rate primarily due to saturated growth in the man-made fibre (MMF) textiles and clothing segment caused by higher duty structure.

He added that indigenous fibre manufacturers were adopting import parity pricing policy taking advantage of the tariff protection, and the fact that white cotton was available at international price.

On the forth-coming Budget, Kumar said that he is hopeful that the Centre would consider the long pending agenda of removing the 5 percent import duty, four per cent special additional duty and anti-dumping duty and further reduce the central excise duty from 12.5 percent to six percent levied on MMF.

SIMA further requested the government to continue the optional Cenvat route for cotton textiles which was introduced in 2004 owing to a break in the excise net across the textile value chain.

SIMA Chairman added that the continual of the optional Cenvat is essential thus preventing hardship for the ailing spinning sector due to steep fall in yarn exports.

The Indian textile industry has the potential to become a USD 350 billion industry from the current level of USD 110 billion creating new jobs for about 35 million people by 2023, provided creating a level playing field is mentioned in the Budget.

The domestic textiles and clothing industry provides jobs to over 105 million people particularly in rural areas and women folks.